I really don’t miss tax season.
Fresh out of college, I landed my first job in the tax department of one of the top 10 public accounting firms. Early that February, I quickly learned that the months leading up to April 15th are a true test of endurance. In a sink or swim atmosphere, were getting home after 10 pm becomes a regular occurrence, I soon became very familiar with itemized deductions, capital gains, and coffee.
Even for those not in the tax profession, tax season always comes with its aura of dread. This year American taxpayers have been granted an extra few days of agonizing procrastination. April 15th graciously falls out on a Saturday, which normally results in Tax Day being pushed off until Monday. However, in an ironic twist, it is pushed off again until Tuesday due to Emancipation Day, a localized federal holiday commemorating the end to slavery in Washington, D.C., back in 1862.
So, in honor of the impending tax deadline, this ex-professional 1040 preparer wants to share some tax season tips:
If you’re only pulling out Turbo Tax now, well, there’s always next year to get in line. Starting on your taxes early will help ensure that you don’t leave out anything important, and you will also get that refund sooner. And if you hire a tax preparer to crunch your numbers, they will appreciate your punctuality. Believe me, I know.
So, you did procrastinate to the point where an April 18th filing is impossible. Well, you have another chance. Filing Form 4868 grants you an automatic filing extension. Beware that any taxes you owe for 2016 are still due to Uncle Sam’s pocket by April 18th, so you will need to run at least a rough estimate now. The extension will give you until October 15th to file, but don’t push it off until then. Take some time during the lazy summer days to get it over with.
If you haven’t yet, now may be the time. You have until April 18th to contribute to an IRA retirement account and still qualify for a deduction on your 2016 return. You can contribute up to $5,500 annually, potentially a sizeable deduction.
This tax season has been abuzz with the latest scams. Telephone calls from individuals claiming to be IRS agents demanding prompt payments for delinquencies are on the rise, often threatening arrest or driver’s license suspension. Phishing emails and text messages requesting confidential financial information increased by 400 percent this year. I received both in the past week. Don’t fall for it. The IRS will never demand immediate payment over the phone or request confidential information via email or text. Bills will always come in the mail, and payments should only be made directly to the IRS or the US Department of Treasury.
Tax reform is front and center on the Trump Administration agenda. The President has called for a simplification of our 74,000-page tax code, including the replacement of our seven-tier tax rate system with just three tax rates. Under his plan, the standard deduction would increase to $15,000 for single taxpayers, and $30,000 for married filing jointly, a drastic increase from the current levels of $6,350 and $12,700. Personal exemptions, the head of household filing status, and the estate tax would be eliminated. If the President succeeds, we may be looking at an entirely new tax return in the coming years.
So, as we close in on D-day, if you have already completed your 2016 filing, enjoy your freedom. If not, I wish you the best of luck in your race against the ticking clock.
By filling out this form, you submit your information to Viventium, who will use it to communicate with you regarding updates and other services.